Categories: Precious Metals
Topics: General Precious Metals

Mawson Gold (TSX: MAW)(OTC: MWSNF) CEO Michael Hudson on Delivering a Million Ounce Resource Upgrade in Finland

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the chairman & CEO of Mawson Gold — Mr. Michael Hudson. Mr. Hudson, how are you today?

Michael Hudson: I'm pretty good. Thanks, Gerardo. Thanks for having me back as always.

Gerardo Del Real: No, thank you. Congratulations are most definitely in order. Not only did you just announce a million ounce gold equivalent resource out of Finland… you did it the right way!

You did that by increasing the gold ounces by 47 percent. And unlike most companies, you didn't sacrifice grade to do so. The gold grade actually went up 19 percent. And that's extremely rare in our business. So congratulations to you and the team. I will let you provide the context.

Michael Hudson: Thanks, Gerardo. I was talking with somebody the other day, and I said, Geez, statistics is very much like statistics. Lies, lies, and statistics, right? 

So you can make a resource whatever you choose. And the solid and credible people in our business, of course, do them very appropriately, incredibly. And that's what we've tried to do here. A very solid upgrade. 

Of course, you can make more ounces by lowering the head grade. And we could have had more ounces in that way. And we provided some of the sensitivity around more ounces. But we thought that demonstrating the robustness of the resource by the high-grade nature of it… it is a top quartile grade deposit. It's a three gram deposit from surface-to-depth on average. And you don't see that very often.

One gram per tonne is the average grade mine so we're three times the average grade mined on earth. And that makes it a valuable asset. And we wanted to demonstrate that point. We've had some very good drilling through the deposit, and that's demonstrated in this grade. 

That was a surprise for us in many respects… just how it held up. You never know in three dimensions how every hole pools together. So that was the pleasant surprise for us and why we had to get our headline; million ounces. We made that a big aim for ourselves, internally, and we hit that and exceeded it. But grade is king.

Gerardo Del Real: I mentioned, well, and of course, grade leads to margin, right? And margin is what the mid-tiers and the majors are going to look at when they imagine this project producing. 

We talked last time about how we envision this as a mine. A big reason for that confidence is you added 300,000 to 400,000 ounces — gold equivalent ounces — in a roughly 10-week drilling window. And then you put this resource out. And you could have easily used — and you did provide the sensitivity — but you could have easily used a $1,700 long-term gold price. You were conservative. You chose $1,590 an ounce. 

Again, you did it the right way. And if you can add 300,000 to 400,000 gold equivalent ounces in a roughly 10-week window, I can only imagine that, from the outside in, there's got to be a lot of interest wondering what you can do with (A.) a more aggressive program and/or budget and (B.) the support of possibly a major, right?

Michael Hudson: There's many ways to increase; through budget, through bringing more rigs. We're currently permitted for five rigs during that winter period. And our new permit, we've sought to go to seven rigs. 

There's things like thinking about underground declines and permitting those to have all-year-round drill access outside the winter period in those wetter areas that require the ground to freeze. 

There's many ways to think about how to increase the drilling rate. That will become important as we go forward, of course, because we need to make this a lot bigger because it demands it. We've only tested 5% to 10% of our area-of-interest; that stratigraphic position that hosts mineralization and sees this lake gold structural overprint. That snakes around our project for 70 or 80 kilometers, and we've only tested a very small part of that. It will get a lot bigger. 

But equally, we need to de-risk our ounces through engineering, permitting, and the ESG stewardship that we've demonstrated up there with great local support, stakeholder support, but still continue to work on that. Never assume that that's in place. That's an ongoing mission critical part of the project. 

So by de-risking the ounces also means increasing the drill density at some point, and that will mean more drilling rather than less. We've already got something like 80-plus kilometers into the project; 70 kilometers into the resource. That will go up a hell of a lot more as this project develops… but we like what we see.

Gerardo Del Real: Well, milestone moment for the company. Congratulations! What comes next? What can Mawson Gold shareholders expect here the next three to four months to close out the year? 

Frankly, I believe these next four months, closing out the quarter, Q3, and then closing out Q4, are going to be incredibly consequential in a positive fashion for the gold price and for the better juniors, especially the ones that not only have robust resources with robust grades but also multiple, multiple exploration packages in stable jurisdictions. 

Mawson Gold checks all of those boxes. What comes next, Mike?

Michael Hudson: Well, Finland, the strategy, as I said, is to make it bigger and to de-risk the ounces we found and will find. That means more drilling, more permitting, and more work on that front. We're not going to go into a big program until early next year when everything freezes again. 

We have the opportunity to drill in summer-permitted areas later on in the next few months; later on this year. We've still got our teams very active on the ground looking for those new discoveries… running geophysics over that larger land package. It's really moving back to the exploration side of things over the next few months I'd say in Finland.

Then, of course, we're drilling in Australia where we haven't stopped. We haven't spoken too much about the Australian assets over the last few months as we've had this overwhelming tidal wave of drill results coming to the table in Finland that has led to this single number resource that we've just put out. So we'll focus a little more on Australia, too, and the news flow there.

As we've talked about, we're looking at opportunities of splitting the two assets and potentially putting the Australian assets into an Australian listing that will help unlock the value there. We're looking at sorting out some shareholder positioning, which should lead to a rerate, we believe, in the stock also. 

So there's a number of things happening. But fundamentally, the drill strings have been working and in good jurisdictions, as you've said, so that's made our job a hell of a lot easier.

Gerardo Del Real: Well, exciting times for the company. Congrats again! Thank you for your time, Mike.

Michael Hudson: Thanks, Gerardo.

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